DCA Q&A: CAN WE HOLD BACK WAGES FOR INCOMPLETE WORK?
Q: We had to let one of our employees go last week – it was a mix of cash-flow and levels of competence, as we’d had a couple of clients complaining. As part of a redundancy settlement, we agreed to pay him his full wages at the end of the month.
However, as I’ve been going through his emails and files, I’ve found several jobs that he told me were finished are only half complete. I’ve also found that the clients he was managing are far more angry than I’d thought, and with good reason: he’s been making (and breaking) frankly batty promises to try to keep them happy for months now.
I’m furious – I’ve got to clear up this mess, and I’m 90% sure that we’ll lose business as a result. Do I have to pay him the full wage despite the fact that he clearly misled us?
A: Unfortunately, you do. There are set circumstances when an employer can withhold an employee’s wages. If the deduction is required by law (for PAYE or PRSI) or a court order (such as maintenance for a spouse), that’s fine. You can also deduct if an employee has been on strike, or to recover an overpayment of wages or expenses. Any other deductions call for an employee’s consent – arbitrarily taking away the money will get you in a lot of trouble.
That’s not to say, though, that an employer has no recourse if an employee’s conduct has actually cost them money – they can seek redress through the courts. Of course, this costs money, and is fairly uncertain, so I doubt you want to do that.
What I’d suggest is writing to him outlining exactly what you have discovered, and noting that you do not intend to let the matter lie. The more documentary evidence you have that he deceived you in the run-up to you letting him go, the better. The neatest solution to this, in all honesty, would be for him to waive his right to some (or all) of the payment he’s yet to receive as full and final settlement of any claim you have. However, if he does not agree to do this, you’ll have to pay him what he’s owed and pursue your claim for compensation separately.
In the longer term, of course, you’ll have to have a think about what systems and controls you adopt to ensure an employee doesn’t run rings around you again, though I’m sure you already know that. Your best bet is to increase your own contact with clients, letting them know that they can come to you if they’re having any problems.
Eamonn Garvey,
Partner,
DCA Accountants and Business Advisors
If you have a question that you would like answered, please email us at info@dca-ireland.com and we’ll get back to you.
Individual’s names and company names will not be published in our Q&A section to protect privacy.
For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.
